By TIOL News Service

MUMBAI, SEPT 07, 2015: THE appellant had filed refund claim in respect of the service tax paid on inputs services viz. Port services and CHA services used for manufacturing of goods which are exported.

Both the lower authorities rejected the claim on the ground that appellant had not complied with the conditions of notification inasmuch as they failed to furnish evidences of actual payment of service tax.

Before the CESTAT, the appellant submitted that both lower authorities are insisting upon evidence of payment of service tax by the service provider while notification 41/2007-ST does not impose any such condition.

The AR supported the order and submitted that in the absence of any proper documentary evidences, refund claim has been correctly rejected.The CBEC Circular no. 106/9/2008-ST dated 11/12/2008 is adverted for emphasis.

The Bench, at the outset,noted that the order is unsustainable for more than one reason.

It was observed -

+ Finding recorded by the lower authorities of the documents are improper, the document in appeal, on perusal, found to be correct and in accordance with the provisions of Service Tax Rules.

+ We find that the invoices contain service tax registration Number, Name and address of the invoice maker and appellant's name as the services receiver.

+ As regards the documents of Port Trust, we find that the said documents clearly indicate service tax registration number of Mumbai Port Trust and service tax amount discharged under the head "Port Services".

+ In our considered view, there being no dispute as to the facts that services were utilized by the appellant for export of goods, rejection refund of such an amount is incorrect.

+ Secondly, we find both the lower authorities recording that appellant should have produced evidence as to payment of service tax liability by the service provider to the government of India is a non-starter and curious findings. We find on careful reading of notification no. 41/2007-ST dated 06 Oct. 2007, it does not indicate that the refund claim is to be evidenced by producing information of the service provider having discharged the service tax liability. After going various clause (f) we find that the only evidence required is payment of service tax on the specified services which in our view, is satisfied in this case by showing that the invoices which was raised by the service provider were paid by the appellant.

+ It is a common sense that no one will be allowed to enter the Mumbai port trust area and export without paying the changes/fees to port trust. In our view, the conditions of notification of discharging the service tax liability by the appellant to the service provider are satisfied and there is no reason for rejecting the appeal.

Holding that the order was unsustainable, the same was set aside and the appeals were allowed with consequential relief.

(See 2015-TIOL-1878-CESTAT-MUM )